7. The shareholders of INVERSIONES NUEVA COSTA VERDE AERONÁUTICA LIMITADA are the following (Table 6):

Table 6

Partners

Percentage

Main partner

Costa Verde Aeronáutica S.A.

99,99%

Inversiones Costa Verde Aeronáutica Limitada (99.8%)

Inversiones Costa Verde Aeronáutica Limitada

0,01%

Inv. Costa Verde Limitada y Cia in C.P.A.

8. The shareholders of COSTA VERDE AERONÁUTICA SpA are the following (Table 7):

Table 7

Shareholder

Percentage

Inversiones Nueva Costa Verde Aeronáutica Dos Limitada

100%

9. The partners of INVERSIONES PRIESCA DOS Y CIA. LTDA. are the following (Table 8):

Table 8

Shareholder

Percentage

Ignacio Cueto

99%

Others

1%

10. The partners of INVERSIONES CARAVIA DOS Y CIA. LTDA. are the following (Table 9):

Table 9

Shareholder

Percentage

Juan José Cueto

99%

Others

1%

11. The partners of INVERSIONES EL FANO DOS Y CIA. LTDA. are the following (Table 10):

Table 10

Shareholder

Percentage

Enrique Cueto

99%

Others

1%

12. The partners of INVERSIONES LA ESPASA DOS Y CIA. are the following (Table 11):

Table 11

Partners

Percentage

Inversiones La Espasa Dos S.A.

99%

María Esperanza Alcaíno Cueto Uno y Cia. Ltda.

1%

13. The partners of INVERSIONES LA ESPASA DOS S.A. are the following Table 12):

Table 12

Shareholders

Percentage

Inmobiliaria e Inversiones La Espasa Limitada

99%

María Esperanza Alcaíno Cueto Uno y Compañía Limitada

1%

INVERSIONES MINERAS DEL CANTÁBRICO LIMITADA, is a company 100% owned by the Cueto Group, and its final shareholders are the persons identified in paragraph 5 above.

The rest of the shareholder base is composed of a diversity of institutional investors, legal entities and natural persons. As of January 31, 2017, 4.6% of LATAM’s property ownership was in the form of ADRs.

Listed below are the controlling shareholders, other main shareholders and LATAM’s minority shareholders who, either in and by themselves or along with others with whom they have a standing joint action agreement, may designate at least one company board member, or weigh 10% or more of the company’s voting shares.

Shareholding (as of January 31, 2017)

Number of subscribed and paid shares

Property ownership % over the subscribed and paid shares

Shareholder

Cueto Group[1]

171,430,090

28.3%

Costa Verde Aeronáutica S.A.

90,427,620

14.9%

Costa Verde Aeronáutica Tres SpA

35,300,000

5.8%

Inversiones Nueva Costa Verde Aeronáutica Ltda.

23,578,077

3.9%

Costa Verde Aeronáutica SpA

12,000,000

2.0%

Others

10,124,393

1.7%

Qatar Airways [2]

60,837,452

10.0%

QATAR Airways Investments (UK) LTD

60,837,452

10.0%

Amaro Group[3]

18,342,913

3.0%

TEP Chile S.A.

18,342,913

3.0%

Eblen Group

35,945,199

5.9%

Inversiones Andes SpA

17,146,529

2.8%

Inversiones Andes II SpA

8,000,000

1.3%

Inversiones Pia SpA

5,403,804

0.9%

Comercial Las Vertientes SpA

5,394,866

0.9%

Bethia Group

33,367,357

5.5%

Axxion S.A.

18,473,33

3.0%

Inversiones HS SpA

14,894,024

2.5%

Other minority shareholders

286,484,682

47.2%

Total

286,484,682

47.2%

[1] The Cueto Group, whom we also refer to as “LATAM’s Controlling Shareholders”, have executed a Shareholders’ Agreement with the controlling shareholders of LATAM, TEP Chile and TAM, whose terms and provisions are spelled out below.

[2] Qatar owns 9.999999918% of total issued shares of LATAM.

[3] The Amaro Group, whom we also refer to as “TAM’s Controlling Shareholders”, have executed a Shareholders’ Agreement with LATAM and its controlling shareholders, whose terms and provisions are spelled out below.

Following the combination with TAM in 2012, the Amaro Group, which includes the Chairman of the Board of Directors, Mauricio Amaro and the former board of directors María Claudia Amaro, among others, also became the principal shareholder of LATAM Airlines Group, through TEP Chile SA (Rut No. 76.152.798-3), a company wholly owned by the Amaro Group and through the majority ownership of Holdco I, which owns 100% of TAM’s common shares. During 2016, the Amaro Group decreased its stake in LATAM, being as of January 31, 2017, direct owner of 3.02% of LATAM Airlines Group common stock and 5.82% indirectly through 21.88 % ownership owned by Amaro Group in Costa Verde Aeronáutica SA, the main investment vehicle of the Cueto Group in LATAM.

Also in 2016, on the occasion of the capital increase approved at the Extraordinary Shareholders’ Meeting held on August 18, 2016, Qatar Airways entered the property of LATAM, holding at January 31, 2017, 10.0% [1] of the total The subscribed and paid-in shares of LATAM Airlines Group through the company Qatar Airways Investments (UK) Ltd.

Finally, we would like to point out that as of this date company shareholders have not submitted any comments or proposals with respect to the company’s business affairs.

The table below shows the number of subscribed and paid shares and the percentage shareholding in LATAM’s property ownership of each of the company’s board members and senior executives:

Board’s total shares

N° of shares

Percentage

Georges de Bourguignon Arndt [4]

0

-

Juan José Cueto Plaza [5]

171.430.090

28,27%

Ramón Eblen Kadis [5]

35.945.199

5,93%

Carlos Heller Solari [5]

33.367.357

5,50%

Juan Gerardo Jofré

81.882

0,01%

Maurício Rolim Amaro [5]

18.342.913

3,02%

Francisco Luzón López

0

-

Henri Philippe Reichstul

0

-

Giles Agutter

0

-

Executives’ total shares

N° of shares

Percentage

Enrique Cueto Plaza e Ignacio Cueto [5]

171.430.090

28,27%

Armando Valdivieso

95.859

0,02%

Ramiro Alfonsín

0

-

Claudia Sender

0

-

Juan Carlos Menció

0

-

Emilio del Real

0

-

[1] Qatar owns 9.999999918% of total issued shares of LATAM.

[4] It should be noted that Georges de Bourguignon Arndt does not directly own any LATAM shares; but rather, that he is the Legal Representative of a company owned by his children that owns 3,153 LATAM shares.

[5] It should be noted that Juan Jose Cueto Plaza, Enrique Cueto Plaza and Ignacio Cueto Plaza are part of the Cueto Group, Ramon Eblen Kadis is part of the Eblen Group, Carlos Heller Solari is part of the Bethia Group and Mauricio Rolim Amaro is part of the Amaro Group, since none of them own the above-mentioned shares on their own, but rather through the group in which they participate.

Shareholders’ Agreement

Following the combination between LAN and TAM in June 2012, LAN Airlines S.A. was transformed into “LATAM Airlines Group S.A.” and TAM continues to exist as a subsidiary Holdco I and LATAM. In order to execute this combination, TAM’s controlling shareholders created four new closely-held stock companies pursuant to Chilean law: TEP Chile, Holdco I, Holdco II and Sister Holdco. Upon execution of the above-referred transaction, Holdco II and Sister Holdco ceased to exist.

Prior to such business combination, LATAM Airlines Group and its controlling shareholders executed several shareholders’ agreements with TAM, its shareholders (acting through TEP Chile) and Holdco I, thus establishing agreements and restrictions related to corporate governance in an attempt to balance the interests of the LATAM Airlines Group, as the owner of substantially all economic rights in TAM, and TAM’s controlling shareholders, as the continuing controlling shareholders of TAM pursuant to Brazilian law. In order to achieve these objectives, the various shareholders’ agreements prohibited undertaking certain actions and making important corporate decisions without the prior approval of a qualified majority of its shareholders and/or the Board of Directors of Holdco I or TAM. Moreover, these shareholders’ agreements also establish the parties’ covenants regarding the governance and management of the LATAM Airlines Group, subsequent to the combination of LAN and TAM businesses.

The LATAM Group’s governance and management

Insofar as the governance and management of the LATAM Group is concerned, there are different shareholders’ agreements:

Shareholders’ agreement of the controlling group: executed between the controlling shareholders of LATAM and TEP Chile, establishing agreements with respect to the corporate governance, control and operation of LATAM, Holdco I, TAM and their respective subsidiaries. It also governs the votes and transfers of the ordinary shares of the LATAM Airlines Group and the voting shares of Holdco I owned by TEP Chile.

Shareholders’ agreement between the LATAM Airlines Group and TEP: executed between LATAM and TEP Chile; wherein, among other subject matters, it establishes agreements regarding the corporate governance, management and operation of LATAM. It also governs the relationships between LATAM and other LATAM Group members.

Shareholders’ agreement of Holdco I: executed between LATAM, Holdco I and TEP Chile establishing agreements with respect to the corporate governance, management and operation of Holdco I, as well as the votes and transfer of the voting shares of Holdco I.

Shareholders’ agreement of TAM: executed between LATAM, Holdco I, TAM and TEP Chile, establishing the agreements related to the corporate governance, management and operation of TAM and its subsidiaries.

Following the combination of the business of LAN and TAM, the Holdco I and the TAM shareholders’ agreements establish the covenants between the parties with respect to the governance and management of Holdco I, TAM and its subsidiaries (collectively, the “TAM Group”).

Following are the key provisions of the Shareholders’ agreements referred to in paragraphs 1 and 2 above. It is important to note, however, that the rights and obligations of the members of the Controlling Group are indeed governed by the terms and conditions of such shareholders’ agreements and not by the summary of any of such agreements contained in this annual report.

Board membership of the LATAM Airlines Group

Mr. Mauricio Rolim Amaro was re-elected as board member of the LATAM Airlines Group in April of 2015. If Mr. Amaro abandons and leaves his position vacant for any reason whatsoever during the two-year period, TEP Chile has the right to appoint his replacement in order to complete the mentioned period. Subsequently, the Board of Directors of the LATAM Airlines Group shall appoint any of its members as Chairman thereof, in accordance with existing statutes. Maria Cláudia Oliveira Amaro was elected as board member of the LATAM Airlines Group in June 2012, and resigned her position in September 2014. On the same date, and pursuant to Chilean law, Henri Philippe Reichstul, was appointed by the Board to replace Maria Cláudia Oliveira Amaro until the next shareholders’ meeting that was held in Santiago, Chile on April 28, 2015, at which time he was confirmed as board member.

Management of the LATAM Airlines Group

In June 2012, Enrique Cueto Plaza became LATAM’s CEO (“LATAM CEO”). The position of LATAM CEO is the top-ranking position in the LATAM Airlines Group, who reports directly to the LATAM’s Board of Directors. The LATAM CEO is in charge of overall supervision, direction and control of the LATAM Airlines Group’s business and certain other responsibilities set forth in the Shareholders’ Agreement of the LATAM Airlines Group and TEP. Upon the eventual departure of LATAM’s current CEO, the LATAM Board of Directors will appoint his successor after receiving a recommendation from the Leadership Committee.

In June 2012, Ignacio Cueto Plaza became LAN’s CEO (“LAN CEO”). The LAN CEO reports directly to the LATAM CEO and is responsible for the general supervision, direction and control over the passenger and cargo operations of the LATAM Group, excluding those assumed by Holdco I, TAM and its subsidiaries, and those regarding the international passenger business of the LATAM Group. The LAN CEO, in conjunction with the TAM CEO, are responsible for recommending the LATAM CEO candidate to serve as head of the international passenger business of the LATAM Group (including long-haul and regional flights), who must report jointly with the LAN CEO and the TAM CEO. The key executives of the LATAM Group (in addition to the LATAM CEO and those of the TAM group) shall be appointed by and report directly or indirectly to the LATAM CEO. Ignacio Cueto is scheduled to leave his post as LAN CEO on April 15, 2017 in order to apply to LATAM’s Board of Directors and, in line with the strategy of building a simpler company the position will not be replaced.

The main headquarters of the LATAM Airlines Group are still located in Santiago, Chile.

Following are the key provisions of the Shareholders’ agreements referred to in the preceding paragraphs 3 and 4. It is important to note, however, that the rights and obligations of the members of the Controlling Group are indeed governed by the terms and conditions of such shareholders’ agreements and not by the summary of any of such agreements contained in this a.

Board membership of Holdco I and TAM

The shareholders’ agreement of Holdco I and the shareholders’ agreement of TAM provide, in general terms, identical board memberships and the same Holdco I and TAM CEO; whereupon LATAM appoints two board members and TAM appoints four board members (including the Chairman of the Board).

Management of Holdco I and TAM

The affairs and day-to-day business of Holdco I shall be managed by the CEO of the TAM Group under the supervision of the Board of Directors of Holdco I. The affairs and day-to-day business of TAM will be managed by the Board of Directors of TAM under the supervision of the Board of Directors of TAM. The “TAM Board” shall be comprised of the TAM Group’s CEO, TAM’s CFO, TAM’s COO and TAM’s CCO. Currently, the position of TAM CEO is being performed by Ms. Claudia Sender. The TAM Group’s CEO will be in charge of overall supervision, direction and control over the business and operations of the TAM Group (on matters not related to the LATAM Group’s international passenger business) and will perform all orders and resolutions issued by TAM board members. The initial TAM CEO, “CFO of TAM’S CFO” has been jointly appointed by LATAM and TEP Chile and any successor of the CFO shall be designated by TEP Chile from among three candidates proposed by LATAM. The TAM COO, “TAM’s COO”, and the commercial manager of TAM, “TAM’s CCO”, shall be jointly appointed and recommended to TAM’s Board of Directors by the CEO of the TAM Group and TAM’s CFO; additionally, he/she must be approved by TAM’s Board of Directors. These shareholders’ agreements also govern the composition of the board of directors of TAM’s subsidiaries.

Following the combination, TAM still has its main headquarters located in São Paulo, Brazil.

Actions requiring qualified majority votes

Certain actions of Holdco I or TAM require approval by a qualified majority of the board or the shareholders of Holdco I or TAM; which, indeed require the approval of LATAM and TEP Chile before such actions can be carried out.

Those actions requiring qualified majority votes by the boards of Holdco I or TAM are the following:

approving the annual budget and business plan and the multi-year business (collectively known as the “Approved Plans“), and also the amendments to these plans;

carrying out or agreeing to carry out any action that causes, or that may reasonably cause, individually or in aggregate form any capital, operational or other costs of any TAM company and its subsidiaries greater than (i) the lesser of 1% of revenues or 10% of the profits under the Approved Plans, with respect to actions affecting income statement items; or (ii) the lesser of 2% of assets or 10% of cash and cash equivalents (as defined by the IFRS) as established in the provisions of the Approved Plans and in effect, in relation to actions affecting the cash flow statement;

the creation, disposal or admission of new shareholders in one of the subsidiaries of the relevant company, except to the extent that it is expressly contemplated in the Approved Plans;

approving the acquisition, disposal, modification or encumbrance by any TAM company of any assets above $15 million or of any share value or securities convertible into shares of any TAM company or of the Company, except to the extent that it is expressly contemplated in the Approved Plans;

approving any investment in assets not related to the corporate purpose of any TAM company, except to the extent that it is expressly contemplated in the Approved Plans;

executing any contract amount in excess of $15 million, except to the extent that it is expressly contemplated in the Approved Plans;

executing any contract related to the distribution of profits, company associations, business collaborations, alliance memberships, code-sharing agreements, with the exception of those approved in the business plans and budget, except to the extent that they are expressly contemplated in the Approved Plans;

setting, modifying or waiving any right or claim of a relevant company or its subsidiaries in excess of $15 million, except to the extent that it is expressly contemplated in the Approved Plans;

starting, participating in, committing or establishing any important action with respect to any litigation or legal proceeding in excess of $15 million, related to the relevant company, except to the extent that it is expressly contemplated in the Approved Plans;

approving the execution, modification, termination or ratification of agreements with third parties, except to the extent that they are expressly contemplated in the Approved Plans;

approving any financial statement, modifications, or any accounting policy, regarding dividends or taxes relevant to the company;

approving the granting of any interest of securities or guarantees of third party obligations;

appointing executives other than the CEO of Holdco I or the Board of Directors of TAM or re-electing TAM’s current CEO or CFO; and

approving any voting of the relevant company or its subsidiaries in their capacity as shareholders.

Those actions requiring qualified majority votes by the shareholders are the following:

approving any modification of the bylaws of any relevant company or its subsidiaries in relation to the following subject matters: (i) corporate objectives; (ii) corporate equity capital; (iii) rights inherent to each class of shares and their shareholders; (iv) the powers of ordinary shareholder meetings or limitations to the powers of the board of directors; (vi) the deadline; (vii) the change of the main headquarters of a relevant company; (viii) the composition, powers and commitments of the management of any relevant company; and dividends and other distributions;

approving the dissolution, settlement or liquidation of a relevant company;

approving the transformation, merger, division or any type of corporate reorganization of a relevant company;

paying or distributing dividends or any other type of distribution to shareholders;

approving the issue, withdrawal or amortization of debt instruments, shares or convertible securities;

approving a disposal plan for the sale, encumbrance or other involving 50% or more of the assets, as determined by the previous-year balance sheet of Holdco I;

approving the disposal for the sale, encumbrance or other involving over 50% of the assets of a Holdco I subsidiary representing at least 20% of Holdco I or approving to sell, encumber or dispose of shares in a manner such that Holdco I would lose control.

approving the concession of interests over instruments of guarantees toward guaranteeing obligations in excess of 50% of the assets of a relevant company; and

approving the execution, modification, terms or ratification of acts or agreements with related parties, but only in those cases in which the applicable law requires the approval of such matters.

Voting agreements, transfers and other agreements.

The controlling group of LATAM and TEP Chile has agreed, in the Shareholders’ Agreement of the Controlling Group, to vote their respective ordinary LATAM Airlines Group shares as follows:

until that moment, TEP Chile sells any of its ordinary LAN shares (other than the exempt shares, as defined herein below, and owned by TEP Chile), the Controlling Group of LATAM Airlines Group will vote its ordinary LATAM Airlines Group shares to elect to the Board of Directors of LATAM Airlines Group any person designated by TEP Chile, unless TEP Chile owns enough ordinary shares of LATAM Airlines Group in order to directly elect two board members of the LATAM Airlines Group;

the parties agree to vote their ordinary LATAM Airlines Group shares to support the other parties in removing or replacing board members or others designated by the Board of LATAM Airlines Group;

the parties agree to consult among them and make use of their good faith efforts to achieve agreements and act jointly in all actions (except in those actions that require majority approval pursuant to the Chilean law) and be considered by the Board of Directors of the LATAM Airlines Group or by the shareholders of the LATAM Airlines Group;

the parties agree to maintain the size of the Board of Directors of the LATAM Airlines Group at a total of nine (9) board members and maintain the quorum required by the majority of the Board of Directors of the LATAM Airlines Group; and

in case that, after endeavoring in good faith efforts aimed at reaching an agreement with respect to any action requiring a qualified majority vote pursuant to the Chilean law and a period of mediation, the parties do not reach such agreement, then, TEP Chile has agreed to give its vote to the subject matter requiring a qualified majority vote as indicated by the controlling shareholders of the LATAM Airlines Group; which we refer to as “direct vote”.

The number of TEP Chile “exempt shares” means that the number of ordinary shares of the LATAM Airlines Group that TEP Chile owns immediately after the effective date in excess of 12.5% of the valid ordinary shares of LATAM Airlines Group shall be determined on the basis of a total dilution.

The parties to the Holdco I Shareholders’ Agreement and to the TAM Shareholders’ Agreement have agreed to vote their Holdco I voting shares and TAM shares so as to make effective the agreements related to the above-discussed representation of the Board of Directors of TAM.

Restrictions to the transfers.

Pursuant to the Shareholders’ Agreement of the Controlling Group, the controlling shareholders of the LATAM Airlines Group and TEP Chile are subject to certain restrictions regarding the sale, transfer and encumbrance of the ordinary shares of the LATAM Airlines Group and (only in the case of TEP Chile) the voting shares of Holdco I. With the exception of a limited amount of the ordinary shares of the LATAM Airlines Group, neither the controlling shareholders of the LATAM Airlines Group nor those of TEP Chile are authorized to sell the ordinary shares of the LATAM Airlines Group, nor can TEP Chile sell its shareholding rights to Holdco I until June 2015. Subsequently, the sale of the ordinary shares of the LATAM Airlines Group by any of the parties shall be allowed, subject to (i) certain limitations of volume and frequency of such sale, and (ii) only in the case of TEP Chile, the latter company must meet certain minimum property ownership requirements. After June 2022, TEP Chile shall be entitled to sell all its shares of the LATAM Airlines Group and shareholding rights over Holdco I in one block, subject to the following conditions: (i) LATAM Board’s approval of the assignee; (ii) that the sale does not have an adverse effect; and (iii) that the preferred purchase option be in favor of the controlling shareholders of the LATAM Airlines Group; conditions to which we refer, collectively, as “block sale provisions”.

An “adverse effect” is so defined in the Shareholders’ Agreement of the Controlling Group as a significant adverse effect in the capacity of Holdco I to receive the total benefits of the property ownership of TAM and its subsidiaries in order to operate the airline business worldwide. The controlling group of the LATAM Airlines Group has agreed to transfer all the voting shares of Holdco I acquired pursuant to LATAM’s preferred purchase option, for the same price paid for such shares.

Additionally, TEP Chile is entitled to sell as of June 2015 all the ordinary shares of the LATAM Airlines Group and voting shares of Holdco I, subject to meeting the block sale clause, should a liberation event (as described previously) should occur or if TEP Chile is required to exercise one or more directed votes during any 24-month period in two (consecutive or not) shareholders’ meetings of the LATAM Airlines Group held at least 12 months apart, and if the LATAM Airlines Group would not have totally exercised the conversion of options described previously.

A “disclosure event” will occur if: (i) there is a capital increase of the LATAM Airlines Group; (ii) TEP Chile does not exercise all its preferred rights granted pursuant to the applicable Chilean law with respect to the capital increase in relation to all of LATAM Airlines Group’s restricted ordinary shares; and, (iii) after completing the capital increase, the person designated by TEP Chile for the voting of the Board of Directors of the LATAM Airlines Group with the collaboration of the Controlling Group of the LATAM Airlines Group, is not elected as board member of the LATAM Airlines Group.

Additionally, after June 22, 2022 and before the capitalization date of the entire property (as described below under Section “Conversion option”), TEP Chile could sell all or part of its LATAM Airlines Group’s ordinary shares, subject to: (i) the preferred option right in favor of LATAM’s controlling shareholders; and (ii) the restrictions to the sale of ordinary shares of the LATAM Airlines Group more than once during a 12-month period.

The Shareholders’ Agreement of the Controlling Group provides certain exceptions to these transfer restrictions for certain pledged shares of the LATAM Airlines Group realized by the parties and for transfers to subsidiary companies, in each case open to certain limited circumstances.

Additionally, TEP Chile accepted, in the Shareholders’ Agreement of Holdco I, not to vote its Holdco I voting shares, or take any action in support of any transfer on the part of Holdco I of shares or convertible securities into shares issued by them or by TAM or by any of its subsidiaries without LATAM’s prior written consent.

Restrictions to TAM shares transfers

In the Shareholders’ Agreement of Holdco I, LATAM agreed not to sell or transfer TAM shares to any person (other than our subsidiaries), for as long as TEP Chile owns Holdco I voting shares. Without prejudice of the foregoing, LATAM shall be entitled to carry out such sales or transfers if, simultaneously with such sales or transfers, LATAM (or its assignee) would acquire all of Holdco I’s voting shares owned by TEP Chile for an amount equal to TEP Chile’s then in effect taxable base with respect to such shares and pay any cost in which TEP Chile might have to incur in order to carry out such sale or transfer. TEP Chile has irrevocable assigned to LATAM the assignable right to acquire all of Holdco I’s voting shares owned by TEP Chile related to such sale.

Conversion option

Pursuant to the Shareholders’ Agreement of the Controlling Group and the Shareholders’ Agreement of Holdco I, LATAM is unilaterally entitled to convert our non-voting Holdco I shares into Holdco I voting shares up to the maximum allowed by law, and to increase our representation in the Boards of Directors of both TAM and Holdco I as permitted by the Brazilian laws that govern foreign property ownerships and by other applicable laws if the conversion would not have an adverse effect (as previously defined in the section on “Transfer Restrictions”).

During or after June 2022, and after LATAM would have totally converted all its Holdco I non-voting shares into Hold I voting shares, as allowed by Brazilian laws and other applicable laws, LATAM shall be entitled to acquire all of Holdco I’s voting shares owned by TAM’s controlling shareholders for an amount equal to their taxable base with respect to such shares and pay any cost that might be incurred in order to materialize such sale; an amount to which we shall refer as “sale consideration”. If LATAM does not exercise its right to acquire such shares on a timely basis, or if, after June 2022 LATAM should be entitled, pursuant to Brazilian laws and other applicable laws, to convert all of Holdco I’s non-voting shares into Holdco I voting shares, and if such conversion would not have an adverse effect but we would not have exercised such right fully and totally during a specific period of time, then, the controlling shareholders of TAM would be entitled to offer us their Holdco I voting shares for an amount equal to the sale price.

Acquisition of TAM’s shares.

The parties hereto have agreed that all acquisitions of TAM’s ordinary shares by the LATAM Airlines Group, Holdco I, TAM or any of their respective subsidiaries as of and after the effective date of business combination shall be carried out by Holdco I.

Insofar as the main organs of Corporate Governance of the LATAM Airlines Group are concerned, they are: the Board of Directors and the Directors’ Committee (which, additionally, embodies the functions of Audit Committee for the purposes of the Sarbanes-Oxley Act of the United States of America), along with the Committees of Strategy, Finance, Leadership and Product, Brand and Frequent Flyer Program created following the association between LAN and TAM. The main powers of such corporate organs are specified below.

DIVIDENDS

In terms of dividends, the Company has established that they shall be equal to the minimum legally required; namely 30% of profits pursuant to current regulations. The foregoing is not inconsistent with the distribution of dividends over and above such mandatory minimum, in consideration of the peculiarities and circumstances of fact that might be perceived throughout the year.

Going forward, the Company does not expect any changes in its dividend distribution policy.

During the years 2014 and 2015, the Company did not show profits; consequently, no dividends were distributed. During the year 2016, however, the Company provisioned US$ 20,766,119 associated to dividends to be payable during 2017.